The Salisbury South-based drug manufacturer announced on the ASX this morning the $A679m ($US475m) sale of Metrics Contract Services, the company’s oral dose drug development and manufacturing site in Greenville, North Carolina, which employs more than 400 staff.

The business has been acquired by US pharmaceutical multinational Catalent. The New Jersey-based corporation is currently ranked 330^th on the S&P 500 and boasts yearly revenues close to $US4bn.

Mayne Pharma expects the Metrics acquisition to be completed by the end of 2022 and receive $A636m ($US445m) in net proceeds after transaction and restructuring costs.

Mayne Pharma acquired Metrics in 2012 for a reported $US120m.

Proceeds from Catalent’s acquisition will be used to repay debts and return surplus capital to shareholders, Mayne Pharma CEO Scott Richards said.

“Following completion, Mayne Pharma intends to maintain a strong balance sheet with flexibility to fund organic growth and pursue strategic business development opportunities,” Richards told the ASX.

“Allowing for reinvestment needs, the net proceeds from the sale will be used to repay the syndicated debt facility and return surplus capital to shareholders.

“Prior to completion of the sale, the board will determine the quantum and most appropriate way to efficiently return surplus capital to shareholders.”

The market reacted positively to the announcement, with Mayne Pharma’s share price rising 20 per cent this morning to trade at $0.415c before easing back down to $0.375c around lunchtime.

The Metrics sale comes after Mayne Pharma in February reported a $50.4m net loss after tax for the first half of FY22, a significant improvement on the $181.3m loss it recorded in the first half of FY21.

The company’s full net loss for FY21 reached $208m, on top of a $92.8m loss in FY20 and $280m loss in FY19.

Mayne Pharma’s complete FY22 results are due to be released on August 26.

The company has previously attributed its financial losses to a weakening US dollar and poor performance of its generic retail drugs business, which it is has been pivoting away from to focus on women’s health, dermatology, and contract services.

In its most recent financial report, Mayne Pharma identified Metrics as one of the company’s higher-performing business divisions with a 33 per cent increase in its gross profits.

The company told the ASX in February that Metrics’ “pipeline of committed business continues to trend favourably with a strong pipeline of near-term commercial manufacturing opportunities expected to add further recurring revenue streams and provide positive trajectory into FY23”.

“Metrics supports 12 of the top 20 global pharma companies and is one of a few US-based potent solid oral dose CDMOs for early-stage development to commercialisation from a single FDA registered site,” the company said at the time.

Today, Mayne Pharma chair Frank Condella said the sale of Metrics is a “key driver” of the company’s “transformation agenda to reposition … for growth”.

“This transaction unlocks significant value for Mayne Pharma shareholders and creates a leaner and more focused business with financial flexibility to support its strategic priorities,” he said.

“The Board believes the agreement with Catalent represents an attractive opportunity for a business which has reached maturity under Mayne Pharma’s ownership.

“The Board wants to recognise and thank management and all employees at Metric for their efforts in building this exceptional business over the past ten years.”